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Microenterprise development is one of the most discussed antipoverty strategies in contemporary development discourses. Many developing countries have adopted this strategy to fight against poverty.

Misallocations of factors of production have the potential to explain a large portion of cross-country differences in productivity (Hsieh and Klenow, 2009). Yet, empirical evidence relating actual differences in firms' productivity to observable policy distortions has been scarce.

Using data collected from a sample of MSMEs located in urban areas of five major districts in Zambia, this paper investigates the existence and size of switching costs among Micro, Small and Medium Enterprises (MSMEs) when borrowing formal bank credit.

Firm-level survey data for the period 2005-2011 in South Africa suggest that large firms have higher rates of net job creation than small firms and that there is a relatively high reallocation of employment across South African firms.